Monday, September 25, 2006

Expanding abroad takes time and effort

A while back I wrote an article on the Basics of Expanding Abroad which was published on the AsiaPreneuer web site. That article talks about the different levels of expanding abroad starting with exporting through partnerships and on to having your own office in the target country. It talks about some of the pros and cons of each level.

No matter what level you are at, there are two guidelines you need to understand:

1) Expanding Abroad Takes Time. Lots of It.
2) Expanding Abroad Takes Continuous Effort.

I bring these points up because they are common errors that I have seen companies make.

On time, it will probably take longer than the average American company plans for to get everything in place and the income rolling in (Japanese companies, on the other hand, take a much longer view, so often do better when it comes to things like this). You likely will need to plan for a couple of years before everything is in place and going well. In my last post, I said that entering a new country is like a start-up. Actually, it is like a start-up where you don't speak the language, know the business culture, and are trying to manage from 8 time zones away. So you get Rick's Law on steroids.

On effort, you need to keep working with partners, customers, etc. in the target market before everything will be set. One of the biggest mistakes is for a company to put some effort in up front (a visit or two, maybe a training class, etc.), and then sit back and wonder why the sales aren't rolling in. For the U.S. market, this may work Ok, as our business culture is based a lot more on a customer buying based on the virtues of a product, but in other countries (especially east Asia), the relationship between companies is often more important than the product.

Add these two points together, and you get an interesting effect. You have to expect that the people at your company trying to grow sales abroad will be less productive for a year or two. They will be busy working on the new market, but wont be able to show results right away. But if they are putting enough effort into these new markets, they also won't be able to put as much effort into other markets/whatever they were doing before.

If all you are doing is waiting for someone from another country to find your product and says they want to buy it, then what I said here really won't matter. But if you want to take an active approach to increase your sales abroad, then it would be good to heed this advice when planning your approach.


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